department for Environment, Food and Rural Affairs

Neil Parish Excerpts

Tuesday 17th July 2012 Commons Chamber

[Neil Parish (Tiverton and Honiton) (Con)]

Asda has said today that it will put its prices up by 3p for direct sales for farmers, but in 2010, it dropped the price of milk for four pints from £1.50 to £1. Does my hon. Friend agree that that brought about the drop in milk prices across the piece?

[Mr Williams]

My hon. Friend graphically illustrates the inconsistent role of some supermarkets. Along with the groceries code adjudicator, we need to look at how we can bring about fair contracts, to which everyone who has spoken has alluded, to stop the exploitation—an emotive word, yes, but that is the perception on the farms that I represent, as well as that of the National Farmers Union and the Farmers Union of Wales. The contracts that farmers are required to enter are simply unfair, as they are required to give 12 months’ notice or more to pull out of them whereas, as we have heard, processors can change the price they pay for milk at a few days’ notice, or quite literally overnight.

The Government are right to move towards a voluntary code. Like other Members, I look forward to an update from the Minister but I hope that if necessary, the Government will proceed with regulation. As Lord Plumb said in another place, rule books without referees generally have limitations. We all agree in the House that farmers deserve to receive the production cost for their milk, but Robert Wiseman Dairies has announced that from 1 August it will pay 24.73p per litre for milk. Arla Foods milk price will fall to 25p a litre, and the First Milk price to 24.35p a litre—5p less than the cost of production. Any situation in which farmers have to accept less than the cost of production is unsustainable. I commend Waitrose, Sainsbury’s, Tesco, and Marks and Spencer on the positive work that they have undertaken, but we need to ensure that those agreements are made across the board, from retailers to processors, with all major buyers of milk and dairy products agreeing to commit to a sustainable purchasing strategy.